Premier Development Group's Working Capital Turnaround

Northern California real estate developer secured $350K working capital loan to accelerate project acquisitions and cash flow, enabling 40% portfolio growth within 18 months.

Yancy Demarcus, Chief Development Officer & Founder of Premier Development Group, Inc a real-estate business in Northern California standing with a composed expression

Executive Summary

Premier Development Group, Inc, a growing real estate developer in Sacramento, faced a critical cash flow constraint that limited their ability to capitalize on market opportunities. The company secured a $350,000 working capital loan to bridge funding gaps between project acquisitions, development phases, and revenue realization. This strategic financing enabled the company to expand its project portfolio and accelerate regional market penetration.

The Challenge

Insufficient liquid capital to pursue emerging acquisition opportunities in competitive Sacramento and Bay Area markets
Extended payment cycles from contractors and vendors creating 60-90 day cash flow gaps between project phases
Limited ability to close time-sensitive land deals due to delayed access to earnest money and down payment funds
Risk of losing market share to better-capitalized competitors with faster deal-closing capabilities

The Solution

Premier Development Group recognized that their operational constraints stemmed not from profitability but from working capital timing misalignment. The company approached their lender seeking a flexible working capital facility that could support their growth without restrictive covenants tied to specific projects. The $350,000 working capital loan was structured as a revolving credit facility with 24-month terms and monthly interest-only payments during the initial phase.

The funds were deployed strategically across three key areas: $140,000 was allocated toward earnest money deposits and acquisition down payments for three high-potential mixed-use development sites; $120,000 was reserved as operating capital for vendor and subcontractor payments during construction phases, ensuring favorable supplier relationships and maintaining project timelines; and $90,000 was held as a working capital buffer to cover payroll, licensing fees, and professional services during slower project transitions. This layered approach enabled the company to maintain continuous deal flow while preserving cash reserves for operational contingencies.

Yancy Demarcus, Chief Development Officer & Founder
"This working capital loan was transformational for our growth trajectory. We went from turning away opportunities to actively competing on major acquisitions throughout the region."

The Outcome

Portfolio expansion increased by 40% within 18 months, growing from 8 active projects to 12 concurrent developments valued at $47M in aggregate project value
Project acquisition cycle time reduced by 35%, improving from an average 45-day close to 29 days, enabling faster market response
Vendor payment cycle optimization improved working capital turnover ratio by 22%, reducing days payable outstanding from 67 to 52 days
Gross margins on delivered projects improved by 2.3% due to eliminated rush financing costs and improved contractor relationships

Conclusion

The working capital loan proved instrumental in removing Premier Development Group's primary growth constraint. By providing reliable access to capital for timing-sensitive transactions, the company transformed its competitive positioning in the Northern California real estate market.

Looking Forward

Premier Development Group is planning to expand operations into the Stockton and Modesto markets while refinancing two completed projects to recapitalize the working capital facility. Management projects 35-40% year-over-year revenue growth for the next two years, with plans to establish a regional office network and potentially hire a dedicated acquisitions team.